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Taxes · 国外源泉所得 · kokugai gensen shotoku

Income from abroad: how Japan taxes it

An apartment you rent out at home, savings in a bank abroad, a salary from a foreign company, a pension from your home country — do you pay Japanese tax on it? It depends on two things: where the income is earned and how long you have lived in Japan. For your first 5 years, part of your foreign income is taxed only if the money comes to Japan. Below: the rules, examples, the foreign tax credit, currency conversion, tax treaties — and a short section for US citizens.

What is taxed

Filing a tax return

Checked against the websites of the National Tax Agency, the Ministry of Finance and the IRS on October 7, 2026 · Remote work from Japan · Income tax

Years in Japan (out of the last 10) before all your worldwide income is taxed5

Salary for work you do in Japan is taxedFrom day 1

Foreign assets above which you file a separate report¥50M

US foreign earned income exclusion for 2026$132,900

In short

Foreign income in five lines

  • For your first 5 years (in total, out of the last 10) you are a non-permanent resident (非永住者, hieijūsha) for tax. Your foreign income is taxed in Japan only if it is paid in Japan or sent to Japan.
  • After 5 years all your income anywhere in the world is taxed in Japan — whether you bring the money here or not.
  • Work done in Japan is not foreign income. Pay for work you do while you are in Japan is always taxed here, even if a foreign company pays it into an account abroad.
  • Tax paid in another country can be credited against Japanese tax (foreign tax credit, 外国税額控除), but only up to the Japanese tax on that income.
  • Filing: a final tax return (確定申告, kakutei shinkoku) from February 16 to March 15; foreign currency is converted at the bank’s mid rate on the date of the income.

This page is about the income tax (所得税) of people who live in Japan. Resident tax (住民税, jūminzei) follows the same income: what you declare for income tax also goes to your city office.

Your tax status

What Japan taxes depends on your status

Japan does not use a 183-day rule to decide whether you are a tax resident. It looks at the center of your life: home, job, family, assets. Someone who comes for a job that normally lasts a year or longer is a resident from the first day.

Status Who What is taxed in Japan
Non-resident (非居住者, hikyojūsha) No home in Japan and has lived here for less than 1 year Only income from Japanese sources
Non-permanent resident (非永住者) A resident without Japanese nationality who has lived in Japan for 5 years or less in total within the last 10 years Japanese income + foreign income paid in Japan or sent to Japan
Resident other than a non-permanent resident Japanese nationals, and foreign residents after 5 years — with any status of residence, not only permanent residents All income worldwide

Tax status and status of residence are different things. A “permanent resident” for immigration (永住者) is not the same as a resident for tax. A foreign national on a work status of residence becomes taxable on worldwide income after 5 years in Japan. And a permanent resident who has lived in Japan for 5 years or less of the last 10 (for example, after a fast-track permanent residency as a Highly Skilled Professional) is still a non-permanent resident for tax.

Foreign or Japanese income

What counts is where the income is earned, not where the money arrives

Foreign income (国外源泉所得) Japanese income
Salary for work done outside Japan Salary for work done in Japan — from any employer, Japanese or foreign
Rent from an apartment or house abroad Rent from property in Japan
Interest on a deposit at a bank abroad Interest on a deposit at a bank in Japan
Dividends from foreign companies Dividends from Japanese companies
A public pension from another country A Japanese pension
— Fees for services you provide while in Japan (freelancing, consulting)

The most common mistake is to think that anything paid from abroad is foreign income. For the tax office it matters where you worked and where the apartment or the bank is. So remote work from Japan for a company abroad is Japanese income (see below).

Examples

Typical cases

Income First 5 years (non-permanent resident) After 5 years
Salary from a foreign company for remote work from Japan All of it is taxed; a tax return is needed whenever tax is due All of it is taxed
Rent from an apartment in your home country Taxed if the money is paid in Japan or sent to Japan All of it is taxed
Interest on a savings account at home Taxed if paid in Japan or sent to Japan All of it is taxed
A pension from your home country Taxed if paid in Japan or sent to Japan All of it is taxed
Gains from crypto assets Miscellaneous income (雑所得, zatsu shotoku), added to your salary and taxed at the normal rates (a separate 20% rate is planned from 2028 at the earliest). Where it counts as earned for a non-permanent resident — ask the tax office All of it is taxed

Foreign income that is taxable in Japan must be declared even if tax has already been paid on it in another country. Double taxation is removed by a credit (below), not by leaving the income out.

Example calculation

An employee in their 4th year in Japan rents out an apartment at home

You work in Tokyo. Your salary for 2026 is ¥5,000,000, social insurance premiums about 15% (¥750,000). An apartment abroad brings in ¥50,000 a month — ¥600,000 a year (no expenses). You are a non-permanent resident.

The money stays abroad All ¥600,000 sent to Japan
Income for tax ¥3,560,000 (salary only) ¥4,160,000 (salary + rent)
Taxable income ¥1,770,000 ¥2,370,000
Income tax ¥90,300 ¥142,400
Resident tax (income-based part) ¥235,500 ¥295,500
Tax return needed? no (unless there is another reason) yes — income other than salary is over ¥200,000

Important: “sent to Japan” means any transfer from abroad during the year — even of old savings. Up to the amount transferred, the tax office treats it as this year’s income paid abroad: first Japanese income paid abroad (such as a remote-work salary paid to a foreign account), then foreign income. The left column is the case where you transferred nothing from abroad this year.

Bringing the rent to Japan costs about ¥112,000 in tax a year: ¥52,100 income tax and ¥60,000 resident tax. From your 6th year in Japan the rent is taxed in any case — even if the money stays abroad. Rates and deductions: income tax.

Foreign tax credit

How not to pay twice (外国税額控除)

If income tax was already deducted abroad from income that is taxable in Japan, a resident of Japan can subtract it from the Japanese tax.

  • The limit = Japanese income tax × (foreign income ÷ total income). You cannot get back more than the Japanese tax that falls on that income. Credit you could not use can be carried forward for 3 years.
  • For a non-permanent resident only the foreign income paid in Japan or sent to Japan counts.
  • Tax above a treaty rate is not credited. If the other country withheld more than the tax treaty allows, ask that country for a refund of the excess.
  • Salary for work done in Japan is Japanese income, so tax withheld from it abroad usually cannot be credited in Japan under this rule. What to do then depends on the treaty between the two countries — take it to a licensed tax accountant (税理士, zeirishi).

You claim the credit in your tax return with the foreign tax credit statement, so keep the documents that prove the tax paid abroad (tax receipts, withholding statements, the foreign tax return).

Tax treaties

What a tax treaty does — and what it doesn’t

Japan has tax treaties with many countries. A treaty decides which country may tax which income and at what rate. It does not make income disappear from your Japanese tax return.

  • Who taxes what. A treaty sets rules for salaries, business profits, dividends, interest, royalties, pensions and students. Often both countries may tax, with a limit on the rate at the source.
  • Japan removes double tax with a credit. As a resident of Japan you declare the foreign income and subtract the foreign tax (above). The credit is part of Japanese law and also works for income from a country without a treaty.
  • If you are a tax resident of two countries, the treaty’s tie-breaker rules (home, center of interests, habitual abode, nationality) decide which one counts.
  • Lower Japanese withholding. When treaty relief applies to income paid in Japan (for example dividends, royalties or student wages under some treaties), you give the payer the Application Form for Income Tax Convention before the payment, and the payer files it with the tax office.
  • Treaties change. New treaties and protocols take effect from a set date; read the current text for your country, not an old summary.

Is there a treaty with your country? The Ministry of Finance keeps the official list: The List of Japan’s Tax Conventions (MOF, English). The treaty forms in English are on the National Tax Agency page for tax conventions. Students: tax treaties and part-time wages.

Remote work for a foreign employer

Taxed in Japan from the first day

Many people keep working remotely for an employer back home after they move to Japan. For Japanese tax this is work done in Japan.

  • Japanese income. Salary for work you physically do in Japan is income from a Japanese source, whoever pays it and wherever it is paid — also during your first 5 years.
  • A tax return is up to you. A foreign employer withholds no Japanese tax. The ¥200,000 rule does not apply: you must file whenever there is income tax to pay for the year, and in any case declare the income to the city for resident tax.
  • Social insurance. A foreign employer without an office in Japan usually does not enroll you in Japanese insurance — you then join National Health Insurance and, aged 20 to 59, National Pension at the city office.
  • Tax withheld at home on the same salary is a matter for the treaty, not for the foreign tax credit (see above).

Linked to your visa.

  • Your status of residence must allow the work. Activities outside your status of residence are illegal, even if the employer and the money are abroad. A student or a Dependent needs part-time work permission (資格外活動許可) and stays within 28 hours a week; a work status covers only the activities it was granted for.
  • Digital Nomad status: nationals of eligible countries (visa-exempt countries that also have a tax treaty with Japan) with an income of at least ¥10 million a year can work remotely from Japan for up to 6 months. India, Vietnam, the Philippines and Nepal are not on the list.

Digital Nomad · Work visas · Remote work from Japan

How to declare it

Tax return, exchange rates and resident tax

  • When you must file. If your only other income is a Japanese salary with a year-end adjustment, you file when your other income (after expenses) is over ¥200,000. If you have a salary from which no Japanese tax was withheld (for example from a foreign employer), you file whenever tax is due. The period is February 16 to March 15 of the following year. How to file: filing a tax return.
  • Exchange rate. Income in a foreign currency is converted to yen at the bank’s mid rate (TTM, 仲値, the middle between its buying and selling rates) on the date the income counts. If you sell the foreign currency for yen at once, you may use the bank’s buying rate (TTB); expenses paid with currency bought at once — its selling rate (TTS). Keep statements with dates.
  • Expenses. Expenses linked to the rent are deducted from rental income — keep contracts and receipts. Add a translation to documents in other languages.
  • Resident tax. Your tax return also serves as the declaration for resident tax. If you do not have to file a return but had taxable income, declare it at the city office (住民税申告) between February 16 and March 15.
  • Filed late? File on your own as soon as possible: the penalty for not filing starts at 5% when you file before an audit, plus delinquency tax (延滞税). If you paid too much, you can claim a refund for 5 years.

Foreign assets

The statement of overseas assets (国外財産調書)

Residents other than non-permanent residents whose assets abroad (apartments, deposits, securities and more) are worth over ¥50,000,000 in total on December 31 file a separate statement with the tax office. The deadline is June 30 of the next year: for assets at the end of 2025, by June 30, 2026. The statement does not replace the tax return: income from these assets is declared separately.

So while you are a non-permanent resident you do not need it — but from your 6th year in Japan think about it in advance, especially if you own an apartment abroad.

US citizens in Japan

Two tax systems at once

The United States taxes its citizens on their worldwide income wherever they live. Living in Japan, you deal with Japanese tax as described above and still file a US return. The main US rules, as the IRS states them:

US rule What it means for you
Foreign earned income exclusion (Form 2555) You can exclude salary earned abroad up to $130,000 for 2025 and $132,900 for 2026, if you pass the bona fide residence test (a full tax year) or the physical presence test (330 full days abroad in 12 months).
Foreign tax credit (Form 1116) Japanese income tax can be credited against US tax. You cannot take the credit on income you excluded under the exclusion.
FBAR (FinCEN Form 114) Required if the total value of your accounts outside the US — Japanese bank accounts included — was over $10,000 at any time in the year. Filed electronically with FinCEN, not with your tax return. Due April 15, with an automatic extension to October 15.
Filing deadline abroad If you live outside the US on April 15, you get an automatic 2-month extension to June 15 (attach a statement). Interest on unpaid tax still runs from April 15.

On the Japanese side nothing is special: after 5 years in Japan your US accounts, US rent and US investment income are taxable here too, and the US tax on them can be credited within the limit. Japanese savings products such as NISA may be treated differently by the US — ask a tax professional who knows both systems. IRS pages: foreign earned income exclusion · foreign tax credit · FBAR · automatic 2-month extension.

Linked to your visa

Taxes are checked at extension and for permanent residency

Linked to your visa.

  • Extending a work status (employees of smaller companies) and a Dependent status: immigration asks for the resident tax certificates (課税証明書 and 納税証明書) for the year. They show all your taxable income.
  • Permanent residency: resident tax certificates for 5 years (3 for spouses of Japanese nationals or permanent residents) and a National Tax Agency certificate that you owe no income tax, consumption tax or inheritance and gift tax (納税証明書 その3). Late payments count against you even if they are paid by now.
  • Undeclared income found by the tax office means back tax, a penalty and delinquency tax — and a record of non-compliance for immigration.
  • Working for a foreign company must be allowed by your status of residence — a separate question from tax (above).

Taxes and your visa · Permanent residency · Extending your period of stay

If you have a family

Spouse, children, parents: what changes

A dependent for tax and a dependent for health insurance are two different things with different income limits. All the rules for families: Family and dependents.

  • Relatives abroad (parents, children) give a deduction only if you prove the relationship and the money transfers with documents. Relatives aged 30 to 69 count only if they left Japan to study abroad, are disabled, or receive at least ¥380,000 a year from you. Transfers are converted at the bank rate on the day of sending. Details: relatives abroad.
  • A spouse’s own income abroad. How a relative’s foreign income (for example a pension) counts toward the income limit for a deduction is not explained on the tax office website. If there is such income, ask the tax office before you claim the deduction.
  • Your spouse can be a non-permanent resident too — the 5 years are counted separately for each person, by their own time in Japan.

FAQ

Questions about income from abroad

Can’t find your question? Write to us — a real person replies.

Ask us a question

I have lived in Japan for 3 years. Do I pay Japanese tax on interest from my bank account at home?

Only if the interest is paid in Japan or you send money from abroad to Japan during the year. For your first 5 years (in total, out of the last 10) you are a non-permanent resident, and foreign income is taxed only when it is paid in or sent to Japan. Any transfer from abroad counts, even of old savings, up to its amount. After 5 years the interest is taxed in Japan in any case.

No. Japan looks at the center of your life: your home, job, family and assets. If you come for a job that normally lasts a year or longer, you are a resident from your first day. The 183-day test appears in tax treaties for other purposes, such as short business trips, but it does not decide residence under Japanese law.

No. Pay for work you physically do in Japan is Japanese income, whoever pays it and wherever the money goes. It is taxed from your first day, also during your first 5 years. The foreign employer withholds no Japanese tax, so you file a tax return whenever tax is due and declare the income to the city for resident tax. Your status of residence must also allow the work.

Yes, if the income is taxable in Japan. You declare it in your tax return and subtract the foreign tax with the foreign tax credit, up to the Japanese tax on that income. Tax withheld abroad above the rate allowed by a tax treaty is not credited — ask the other country for that part back.

The bank’s mid rate (TTM) on the date the income counts. If you sell the foreign currency for yen at once, you may use the bank’s buying rate (TTB). Keep bank statements with dates so you can show the rate you used.

Not necessarily. A treaty decides which country may tax which income and often limits the rate at the source, but both countries may still tax. As a resident of Japan you remove the double tax with the foreign tax credit. Check the treaty with your country on the Ministry of Finance list and read its current text.

Yes. The US taxes citizens on worldwide income wherever they live. You can exclude foreign earned income up to $130,000 for 2025 and $132,900 for 2026, or credit Japanese tax with Form 1116, but not both on the same income. You also file an FBAR if your accounts outside the US were worth over $10,000 at any time in the year. Living abroad on April 15 gives an automatic extension to June 15, but interest runs from April 15.

Sources

Where this information comes from

Rates, limits and deadlines on this page were checked against the official websites of the National Tax Agency, the Ministry of Finance and the US Internal Revenue Service on October 7, 2026. Amounts are in Japanese yen. When a rule changes we update the page and the date above.

This page is general information, not tax advice. Your city office and the tax office decide your actual tax. For a complex case — income from abroad, a business, leaving Japan — talk to a licensed tax accountant (税理士, zeirishi).

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